Thursday, July 17, 2014

How is the Silver Spring Market? Let's first look a general look at the Montgomery County, MD Housing Report for Single Family Homes, courtesy of GCAAR.

Yes,
neighborhoods vary, but this trend is important to look at as well to get a feel
for the local market of single family homes. Listings were up by 14.4% in June
compared to June 2013 and listings are up year to date 44.1% from last year.
Everyone is hearing it is a good time to sell, good interest rates. The
percent of contracts was down compared to last June and comparing last year to
this year, year to date. It looks like more homes were put on the market in
June than went under contract, so there is a net of more inventory. Settlements
were also down compared to last June and overall last year.

To me the listings and
contracts sections are most relevant. If we look to the right of the page,
'Sales Trend', "contracts ratified per month", you can see the market was very
hot last June, with about 1000 homes going under contract. The numbers dropped
for a few months, increased in October and then dipped until January when the
market got hot again....even with the bad weather coming contracts trended up in
February, March and April before going down in May and June. My theory on the
winter is that some sellers held back their homes until the weather was better
and buyers so a lack of inventory. Going down to the pie chart, 12.2% of the
contracts were in the $500k-$599999 range and 9.1% were in the $600k to $699999
range. 8.2% were in the $700k range to the $799999 range. Right below that is
the average and median price of homes that have been going under contract.
Average is literally taking the sales prices and dividing them out. Median ties
to accounts for homes that were either a lot higher or lower than the other
homes and impacted the average.

The next 4 pages are from a June 2014 market report from
Long & Foster, looking at the 20901,20902,20903,20904,20905,20906,20910
zipcodes...Silver Spring. More focussed on our market.

Looking at page 1 above, compared to last year,
units sold up, active inventory the same about, median sales iceup, days on
marked up. The number of homes on the market in June was l5% less than the
number of the homes on the market last June, so inventory is working in a
seller's favor.

The next page (below/ page 2) gives a breakdown of condos/coops, attached and
detached homes on the market. The median sales price in June 2014 was up, $369k compared to $350,500 in 2013.

Page 3 (below) shows that compared to last year the
Silver Spring market has more listings and more contracts than a year ago and
the ratio of asking price to sold price stayed the same at 98.7%.

The
box on the right corner estimates that if no other homes were listed, it would
take 2.2 months for all Silver Spring homes on the market to sell, which is down
by 3% compared to last June.

Page 4 (above), the last page of the report (above) says that in
June it took on average 34 days for a home to get under contract compared to 31
days last year.

Generally speaking it is considered to be a "seller's market" when houses sell in 4/5 months or less and a "buyer's market when homes are the market beyond 4/5 months. However, based on the above statistices, Between 1 and 2 months on the market is a relatively long time for a home to be active in the Silver Spring, MD. market. Of course, there are variables which impact the days a home may be on the market, such as number of buyers looking in different price ranges. That being said, the home probably needs to be repositioned in price and/or property condition if it hasn't gotten under contract within a month or so. In fact, it is my suggestion that one's first price adjustment should be if a home has been on the market for 2 weeks and/or 15 bonified buyers (not neighbors who are just curious) have gone through the home and haven't made an offer, that the price be adjusted and adjust the price/property condition again if in a couple weeks it is still on the market.

You don't often get a second chance to make a first impression. The most activity on a home tends to be the first 2 weeks on the market. So it is important for a home to show well and be priced well up front.

Whenever you or someone you know is thinking about selling your home, I would be happy to come over to look it over, give suggestions on any work/staging you could do to make the home more appealing to buyers and also suggest a price range for listing your home. I appreciate and always hae time for your referrals.

Wednesday, July 16, 2014

A few months ago a person found me on Trulia and sent me a message with a few real estate questions and questions about the Tivoli real estate market. Tivoli is a subivision in Silver Spring, MD, just off of Randolph Road, between Georgia Ave and New Hampshire Ave. The gentleman told me that his friends are selling and would recommend me to them. A few weeks later a gentleman calls me to come to his home in Tivoli and there was an instant connection between me the gentleman and his wife.

In real estate, one saying is that it only takes 1 buyer. We got quality traffic but not a lot of traffic. In fact the sellers were thinking about taking the home off of the market so the wife could go on vacation to see her family, who lives out of the county, and maybe put it back on after she returned. They were nervous that a contract didn't come in the first two weeks. Literally the day after we withdrew the home from the market, an interested buyer called to see the home and we put a contract together. You never know. It only takes an interesting buyer and we got a contract in under 3 weeks, which is wonderful.

Today we settled and the sellers gave back to me this plant which I brought over when we first met.
They said the plant brought luck for the sale and they want it to bring luck to my business and my life. The sellers said that they chose to work with me because of the many testimonials people have written about me, how responsive I was to their questions and my understanding of the market.

So, the next time one of your family members or friends is thinking about relocating, tell them that their first move should be contacting Adam to discuss the market. Even if they aren't thinking of selling but have a real estate question, I would love to talk.

Some home buyers are financially qualified and approved for mortgages by
their lenders but either don't have the available cash for real estate
settlement fees or they would rather use that cash available for home projects
than for their closing costs and they wouldn't buy a home if they didn't have
money available to personalize the home with some renovations.

In their buyer consultations, real estate agents and lenders explain to
their clients that offers on homes can be structured so the seller pays the
closing costs at settlement. Depending on jurisdiction and price range, buyers
are told to structure their offers so that the sellers are give X% closing cost
help at settlement.

Sometimes during negotiations between buyers and sellers, the sales price
and seller credit numbers are moved around and the buyer(s) forget to confirm
with their lender before signing off on the final terms that all the closing
cost help they are due to receive from the sellers can be applied to their
purchase. Did you know that any closing cost help from sellers that cannot be
used by the buyers at settlement stays with sellers? That is right. You cannot
ask/demand that the sellers reduce their sales price to account for the unused
money.

When negotiating the home inspection contingency with sellers, it is
important for buyers to ask their lender how much of a seller credit they can accept
and be able to use either they prefer the money to making the repair(s) and/or
the sellers prefer to give money instead of making the repair(s).

Although buyer agents aren't "responsible" if buyers cannot use
the entire seller credit, they ought to ask the buyer's lender and/or
settlement attorney about the dollar figure and if it will work because the
buyers will likely ask their agents why they didn't check into this.

At a recent settlement on one of my listings, the seller credit couldn't
completely be used. About $20 couldn't be used in the end, which isn't bad. But
it took creativity. For example, the buyer's lender let the buyers pre-pay 12
months of their association fees with some of the seller credit. While it was a
shame that the buyers couldn't use everything, I felt a relief that it was such
a small amount of money that they seemed calm. It was a smooth transaction.
There isn't anything like excitement at the settlement table. It is important
for buyers and sellers to see the final closing costs in advance so they are
not surprised and if something surprising comes up, it can possibly be
resolved.

There is an old saying: measure twice and cut once. That is
how I feel about seller credits. Check carefully up front if you are asking for
it/negotiating for it in your offer and if you are asking/being offered it
based on the home inspection.

Don't leave money on the table.

Whenever you or someone you know is thinking about moving or
has a real estate question, I want you to call or email me. I am here to help
and always have time for your referrals.